afr.com Feb 27 09:11 AFP

World oil prices bolted higher on Wednesday as the twin threats of a possible war in Iraq and low US oil supplies spread fear, traders said.

News that US inventories were close to a 27-year low during a deep freeze, with the threat of a major disruption from a Middle East conflict looming, frightened traders, analysts said.

"The inventory data set panic and fear in the minds of traders," said Fadel Gheit, senior energy analyst at Fahnestock and Co.

"They are starting to think that in the event of a supply disruption we'll be in big trouble," he said.

"Everybody is waiting for a decision regarding war," Gheit added.

"Is the United States going to war alone or with allies? Will this be a long war or a short war? Is Saddam going to stay or not? Are the Iraqi fields going to be left intact?"

New York's benchmark light sweet crude April contract shot up $US1.64 to $US37.70, just shy of a 29-month high, and analysts said the trip to $US40 a barrel may be short.

In London, the price of benchmark Brent North Sea crude oil for April delivery leapt US75¢ to $US33.07 a barrel. advertisement advertisement

According to the Department of Energy, US crude oil stocks fell 1.0 million barrels or 0.4 per cent to 271.9 million barrels in the week ended February 21 when compared to the previous week.

The inventories neared a 27-year low of 269.8 million barrels reported February 12.

Crude oil imports, squeezed by a strike that shook major exporter Venezuela's petroleum industry, fell 437,000 barrels to 8.325 million barrels a day, the government said.

"We've been locked in a deep freeze for two months. We have a potential supply disruption and an important supplier, Venezuela, has kept a significant portion of its production off the market because of the strike," said Mike Fitzpatrick, analyst at Fimat.

"It's only two dollars to get to $US40 (a barrel). We could get there very rapidly," he warned.

"We are at levels right now where it's impossible to tell where we're going," Fitzpatrick said. But "all fundamental elements point to a higher market".

The spectre of a war in Iraq fuelled the rise after Iraqi President Saddam Hussein declared that he would never accept a deal to go into exile, vowing instead to die on his native land.

But Saddam also said his forces would not blow up Iraq's oil wells in the event of war. Baghdad's retreating forces torched fields in Kuwait at the close of the 1991 Gulf war as US-led forces chased them out of the emirate.

Commerzbank analyst Steve Turner in London said prices were helped by Organisation of the Islamic Conference (OIC) members who said they were considering using oil as a "weapon" to fend off an attack on Iraq.

Malaysian Prime Minister Mahathir Mohamad, who called the informal meeting of 48 OIC nations in Kuala Lumpur, warned that tinkering with the oil market could backfire on poorer nations but said it must be considered.

"Some say it might cause a lot of repercussions, but if we don't think about it we may not be able to exert some influence in our favour," Mahathir said.

But "Oil is a double-edged weapon," he added.

"The price of oil goes up, many of the countries of the south are going to suffer the most, many of those poor countries who have no oil."

www.click10.com Posted: 1:19 p.m. EST February 26, 2003

Are Florida taxpayers being hoodwinked into paying to educate foreign visitors? According to a Channel 10 investigation, that's exactly what's happening at at least one Miami-Dade Public School.

It's the same school where investigative reporter Jilda Unruh, three years ago, discovered staff brazenly enrolling adult tourists as Florida residents for free English classes, paid for by you the taxpayer.

Unruh: In light of the state revenue shortfalls, you'd think the legislature and the Miami-Dade School District would be doing everything in their power to clamp down on the the unnecessary expenditure of taxpayer dollars. But, as you're about to see, the same loophole in the law we uncovered three years ago, continues to allow foreign visitors to get an education on your tab.

Unruh: According to their passports, they came from Argentina, Peru, Italy, Brazil and Uruguay. And, not one of them has been authorized by the INS to stay in the United States of America longer than 6 months. In fact, according to the INS, and according to them, they are tourists. Sharon Fernandez is from Venezuela.

Unruh: Are you a tourist?

Sharon Fernandez/Foreign Tourist: A tourist? Yes.

Unruh: So you are not a resident of the State of Florida?

Fernandez: No. No. I'm going back to Venezuela.

Unruh: Yet, Sharon is one of more than half a dozen tourists, who should have been charged a fee for English classes. But, according to documents we obtained, they've all been enrolled in the last two months, as Florida residents at Feinberg/Fisher Adult education center on Miami Beach, entitling them to free English instruction while they're visiting, paid for by you, the taxpayer. Andre Augusto de Carvalho from Brazil is another, according to his roommate.

Unruh: So, he's just a tourist?

Roommate: Yes.

Unruh: But don't just take a roommate's word for it. Take a look at copies of the INS, I-94 tourist visas, which we obtained. In each case, it shows the person's entry date into and scheduled departure date from the United States. Government proof they are tourists. Just one problem: The school district's policy doesn't ask enrollees for these documents. Mayco Villafana is spokesman for the district.

Unruh: The district isn't asking for documents that unequivocally prove they're tourists? Mayco Villafana/Miami-Dade School Spokesman: Correct.

Unruh: Why?

Villafana: Well, we're not asking for that information because state law doesn't require it.

Unruh: That's right! State law doesn't require it, because the Florida legislature has never defined, who is and who isn't, a Florida resident when it comes to adult basic education.

Villafana: The state of Florida law right now is silent when it comes to adult education.

Unruh: Three years ago (May 2001), the Channel 10 Investigators first exposed employees at Feinberg/Fisher adult enrolling tourists as Florida residents, even though they'd admitted they were not.

Foreign Tourist: As I am French, I just put France on it and they just erased it and put Florida resident.

Unruh: This time, we discovered a different problem, but tourists are still getting a free education. After our first investigation, the district issued specific guidelines for verifying residency, actually going above and beyond state law. One of the items enrollees must show is a court sworn declaration of domicile which is the exact document each of our tourists provided, including Sharon from Venezuela. She told us, school officials told her she needed it to enroll for free.

Fernandez: They told me that I can sign up. That its assistance from the government.

Unruh: Martha Montaner is principal at Feinberg/Fisher adult.

Montaner: That's certainly not the practice of this school. We would have to look into it.

Unruh: Will you concede that a person who is only here six months is not a resident?

Villafana: Well, I don't know that. It's far-fetched to think that tourists who only came for a very small amount of time want to take English courses or other vocational classes.

Unruh: Perhaps Villafana and district administrators should meet Sharon Fernandez. Asked why she was taking English classes if she was going back to Venezuela to have her baby, she told us:

Fernandez: To help me in Venezuela. To better my job.

Unruh: Nice for Sharon, but should Florida taxpayers be helping her, and others like her, to get better jobs in foreign countries?

Villafana: We're taking them at their word. Unruh: You're supposed to be the gatekeepers for the taxpayer. You're willing to take people at their word to spend taxpayer dollars?

Villafana: I'm saying that we're taking people at their word so that we can educate them.

Unruh: The district insists it is not an arm of the INS. According to the INS website, a "tourist" is defined as "a non-immigrant or temporary visitor for pleasure, not for permanent residence." State law, however, provides no such definition for adult education. And, as we've shown, you the taxpayer will continue to pay, until the legislature closes that loophole, defines a Florida resident and demands district enforcement.

Copyright 2003 by Click10.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

www.vheadline.com Posted: Wednesday, February 26, 2003 By: Patrick J. O'Donoghue

Petroleos de Venezuela (PDVSA) stoppage leader Juan Fernandez says he has nothing to fear if he is arrested but he has serious doubts about Venezuela’s judicial system … “I am amazed at the speed with which the government is pushing its legal actions when it hasn’t even done anything about April 11.”

Fernandez, who acted as opposition shadow PDVSA president during the December-January stoppage, says all he and other PDVSA executives did was to fight for a better Venezuela … “if that’s a crime then there are millions of Venezuelans who must be arrested.”

• According to the oil sector leader, the government is panicking and persecuting people for their ideas.

Former PDVSA executives & managers have known that they were on the list of possible arrests for alleged civil rebellion and inciting PDVSA oil workers to acts of sabotage.

The threat of arrest against Fernandez has opened the door for opposition politicians to seek other avenues of undermining President Chavez Frias’ governance than those proposed by Fernandez, who represented a hard-line sector of the opposition with international connections.

Some political colleagues suggest that Fernandez' insistence on continuing the strike has set a dangerous precedent in the future, allowing future rebels to point to the relative liberty with which Fernandez & colleagues organized and accomplished the stoppage of Venezuela’s breadwinner with impunity.

www.vheadline.com Posted: Wednesday, February 26, 2003 By: Patrick J. O'Donoghue

Talcual tabloid editor has lashed out at Internet know-alls that hide behind anonymity and launch gung-ho solutions to get rid off President Hugo Chavez.   Petkoff says these “generals” have "big chests" and call on others to do the job for them.

It now seems that moderates in Coordinadora Democratica (CD) have become targets of their habitual bad language … something VHeadline.com has been receiving on the receiving end hourly for the last couple of years.

Talcual also attacks so-called political analysts and hell-raisers on TV chat shows that blast the “weak-kneed elements of CD ... when one thinks they are going to propose some 'new methods, they always end up asking the military to put their theories into practice … if the military don’t do it, they are on the receiving end of the tongues.”

Recalling his guerrilla past, Petkoff says that in the 60s, some people thought the answer was the gun and started an armed struggle for eight years and more … “they accepted the practical consequences of their political criteria and didn’t ask anybody to sing for them.”

Petkoff challenges Internet "tin-pot generals and armchair analysts" that criticize the CD for not mounting barricades and marching to fight the Chavist brigades to put themselves on the front line and lead the troops to Avenida Sucre and 23 de Enero instead of Altamira and Chuao.

“If they aren’t prepared to do that, then they should stop talking rubbish … Talcual will continue, as we were, chewing flowers."

www.globeandmail.com By MATHEW INGRAM Globe and Mail Update

When the Internet frenzy was at its peak, the United States was seen as the pinnacle of economic perfection, while Canada was a sleepy backwater of oil drillers and tree choppers. Now the tables have turned, and Canada is growing while the U.S. struggles to find its footing, amid war fears and a rising debt load. But how long can our fortunes and those of our major trading partner continue to go their separate ways?

As the rising loonie and bullish job-growth reports amply illustrate, all the various stars seem to have lined up for Canada recently, economically speaking. While the United States deals with a ballooning trade deficit — something that has contributed to the pressure on the U.S. dollar, since it implies that the American economy is too weak to support itself — Canada's trade surplus has grown, thanks to demand for commodities.

The United States is wrestling with the prospect of runaway budget deficits that could total $1-trillion (U.S.) over the next five years, adding to a debt that is already so huge Congress has been forced to ask for approval to lift the legislated debt ceiling from its current level. Despite high spending by Ottawa, Canada is likely to have a series of large budgetary surpluses, and the debt has been reduced (somewhat).

Over the past six months or so, each time the new job numbers for Canada came out, economists and other analysts were flabbergasted by the strength of the economy, as job growth blew away even their most optimistic forecasts. Last year, Canada's job market grew by 3.7 per cent, the largest increase in 15 years. In the United States, meanwhile, unemployment rates remain high as companies continue to cut back to reduce costs.

Despite the sluggish overall economic growth south of the border, sales of cars and houses continue to rack up new records in the United States — and both of those markets rely heavily on supply from Canada. The lower Canadian dollar makes it more cost-effective for American companies to buy from us, and to focus on their Canadian assets if they do business here, as lumber giant Weyerhaeuser and most of the major auto makers do.

When it comes to commodities, the two we specialize in that have boosted the economy the most recently are oil and natural gas. As strikes in Venezuela and fears of war in Iraq have crimped the global supply of crude oil and driven prices up dramatically, Canada has benefited handsomely — and more recently, the same effect has occurred with natural gas. The Scotiabank Commodity Index climbed by 5.7 per cent in January and is up 23 per cent over 2002, while energy prices are up 87 per cent.

Canada turned in overall economic growth (as measured by gross domestic product) of about 3.3 per cent in 2002, the best performance of any of the major G7 industrialized countries, and better than the U.S. for the third year in a row. More than half a million jobs were added — although productivity advocates said this kind of job growth wasn't necessarily reason for celebration, since it meant Canada was adding workers instead of trying to become more efficient, the way the United States economy is.

Despite the currently sunny outlook, there are economic clouds on the horizon. Whether they wind up turning into a storm remains to be seen. The largest is the simple fact that Canada's economy is tied so closely to that of the United States, with more than 80 per cent of our exports heading south in an average year. If the U.S. economy remains weak, that is bound to impact our growth eventually, even if we are currently immune.

Canadian money manager Brian Trenholm of Agilerus Investment told Dow Jones that he thinks the U.S. economy will remain weak this year and next, and that this raises the risk that Canada's strength will slow as well. "I think the Canadian economy will follow the U.S. economy. There's a bit of a lag because our currency is currently weak," he said. As the dollar rises, "that will have a dampening effect on some export industries... so I think that will help to temper the Canadian economy."

Signs of that have already appeared, with Canada's trade surplus falling in December to $4.1-billion (Canadian) from $4.3-billion in November. For the full year, the trade surplus sank $9.4-billion to $54.6-billion — the lowest since 1999. "The ongoing woes of the U.S. economy have dealt a blow to Canada's export sector over the past few months, and December's tally was certainly no exception," economist Marc Lévesque of Toronto-Dominion Bank said recently. Exports dropped by 0.3 per cent in December.

It's true that Canada's economy is basking in some powerful sunlight at the moment. Hopefully, the clouds on the horizon will break up before they turn into anything serious — but with an economy the size of the U.S. sitting right next to us, you never know.

E-mail Mathew Ingram at mingram@globeandmail.ca